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    Apr. 10, 2025

SEC Examinations Division: Its Creation and Evolution Over the Last 30 Years (Part One of Two)

In March 2025, the SEC Division of Examinations (Division) celebrated the 30th anniversary of its creation. A lot has happened since then – including a move from generalist staff members to more specialists; increases in the use of technology and data; the creation of the Private Funds Unit; and the release of the Division’s annual exam priorities and risk alerts. This article, the first in a two-part series, discusses the Division’s creation and examines its evolution over the years, with insights from former Division staff members. The second article will look at the present state of the Division and speculate on what its future might hold. See “Present and Former SEC Officials Discuss Examinations” (Jun. 2, 2022).

Outsourced CCO: Perception and Trends

The proliferation of outsourcing in the investment management space is apparent, with reliance on third parties for everything from IT to chief investment officers and everything in between. This guest article by Sean R. Wilke, senior managing director and head of growth strategy for global fund and investor services company IQ‑EQ, explores the newfound popularity and acceptance of the outsourced CCO, as well as the evolution and catalysts driving this industry trend. For more insights from Wilke, see “IFI Global Panel: ESG Will Fundamentally Transform Investing in the Coming Decade” (Mar. 12, 2020).

FCA “Dear CEO” Letter Highlights Focus on Private Markets and Resilience

The latest “Dear CEO” letter to asset management and alternate investment management firms (Letter) from the U.K. Financial Conduct Authority (FCA) sets forth its supervisory priorities for 2025. Its top priorities include private markets – with concerns over valuation, conflicts of interest and retail investor access; market integrity; and consumer outcomes. The Letter complements the FCA’s ongoing policy work, particularly its efforts to support growth. It is intended to help both the FCA and firms prioritize their deployment of resources. “In many ways, the [Letter] reinforces and builds upon themes the FCA has flagged in recent years, but the intensity and specificity have increased,” Leonard Ng, partner at Sidley Austin LLP, told the Hedge Fund Law Report. This article discusses the key takeaways from the letter, with additional commentary from Ng. See “FCA Seeks Input on Updating Asset Management Regulation” (Apr. 27, 2023).

Study Reports on Financial Industry Policies and Controls Around Electronic Communications

The management, monitoring and archiving of electronic communications by investment advisers and broker-dealers has been a priority for both the SEC and CFTC, resulting in nearly $3 billion in fines since their $200‑million settlement with JPMorgan in early 2022. Global Relay Communications Inc. completed its second annual survey of financial firms’ approaches to managing electronic communications in compliance with applicable regulatory requirements. The study covered channel bans; “bring your own device” policies; the U.K. approach to electronic communications; social media; artificial intelligence; and communications surveillance. This article discusses the study’s key findings. See “Off-Channel Communications Are Not the Only Source of Electronic Recordkeeping Violations” (Apr. 25, 2024); and “16 Firms Fined $81 Million in Latest SEC Electronic Communications Recordkeeping Settlements” (Apr. 11, 2024).

SEC Sanctions Carl Icahn and Icahn Enterprises for Failing to Disclose Pledges of Securities

Section 13(d) of the Securities Exchange Act of 1934 and the rules thereunder impose various reporting requirements on persons that beneficially own more than 5% of a public issuer’s securities, including pledges of those securities as collateral. Additionally, issuers are required to report pledges of their securities by their officers and directors. The SEC sanctioned activist investor Carl C. Icahn and Icahn Enterprises L.P. (IEP) for violating those requirements. Although Icahn had originally disclosed, on Schedule 13D, his acquisition of IEP and certain subsequent pledges of its securities to secure margin loans, he allegedly never disclosed multiple subsequent pledges. Also, IEP allegedly failed to disclose Icahn’s pledges in its annual reports. This article details the alleged reporting failures and the terms of the settlements. See “Shorter Filing Deadlines for Schedules 13D and 13G and Other Beneficial Ownership Rule Changes” (Jan. 4, 2024); as well as our two-part series “SEC Proposes Comprehensive Changes to Beneficial Ownership Rules”: Part One (Apr. 21, 2022); and Part Two (Apr. 28, 2022).

McDermott Will & Emery Expands New York Office With Two Additions

Ben Kozinn and Lauren Troeller have joined McDermott Will & Emery in its transactions practice group in New York. Having worked together for several years, they bring to the firm relationships with private equity and investment firms and extensive experience advising on complex transactions shaping related markets. For insights from Kozinn, see “SEC Risk Alert Provides Clarity on Exam Selection Process for Advisers” (Dec. 7, 2023); and “Second Marketing Rule Risk Alert Provides Little Substantive Guidance” (Aug. 3, 2023).

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Women to Watch: Contributions, Achievements and Observations of Outstanding Female Professionals

To mark International Women’s Day, women editors and reporters at ION Analytics interviewed outstanding women in the industries and jurisdictions we cover. In this part, Law Report Group editors Jill Abitbol, Robin L. Barton and Megan Zwiebel profile notable women in data privacy, cybersecurity, private funds and anti-corruption law, including Anne-Gabrielle Haie, Jessica Lee, Micaela McMurrough, Laura Perkins, Amanda Raad, Madelyn Calabrese, Ranah Esmaili and Genna Garver. Enjoy reading their inspiring remarks here.